2019: Week 8

Loom: New Enterprise Messaging Tool? (link)

Think Slack x Telegram (video messaging capabilities), but on email
Pros: efficient, candid, and people always like to see themselves so are incentivized to continue using this product. It’s also easier to dictate / record instructions in an email than type it out concisely. Uploading speed is also fast, as it uploads while the user records
Cons: Could be overwhelming to have yet another messaging platform. Also, super expensive. Pro is $10 / month / user (equivalent to G-Suite pricing)
Competitors: GoVideo, Soapbox. But Loom is market leader with clients wins at large firms (Uber, Airbnb, Hubspot, etc.)

Briq: Rethinking construction (link)

Using blockchain-based ledger and machine learning tools to provide strategic insights into building and project developments
Predict things like success of individual projects, where demand for new projects is likely to occur and how to connect data around construction processes
ProjectIQ – monitors and manages individual projects and workflows
MarketIQ – market intelligence around where potential projects are likely to occur / which projects will be the most successful
Proven management team (Bassem Hamdy, former Wall Street, and helped build Procore)
Great thesis – using data to determine analytics around construction and development, with 12 major developers already added to the client base

Growth of Microbrands threatens incumbents (link)

The growth of “just-in-time” manufacturing means startups no longer need to splurge on inventory
Selling directly to consumers means that microbrands boast a wealth of data as opposed to data filtered by retailers
Online advertising, using platforms such as Facebook, allows brands to target customers with great accuracy. The vast majority of growth in advertising is coming from the digital kind, and a large proportion of this is from small advertisers
In the long term some small brands will be swallowed up but others will be encouraged

Zoom: Thinking about an IPO in April (link)

Web-ex but better code, started by Web-ex engineers who was frustrated the company’s code was unchanged after it was sold to Cisco for $3.2bn in 2007
CEO, Eric Yuan, was the WebEx’s 10th employee, and when he founded Zoom, brought 45 additional WebEx employees
$1bn post-money valuation after $100mm from Sequoia in 2017

Daimler and BMW invest $1.1bn in urban mobility services (link)

In March 2018, decided to merge their urban mobility services into single holding company with 50% stake in each, now want to reshuffle their collective 14 services into 5 JVs (Reach Now (ride rental), Charge Now (charging stations), Park Now (parking services), Free Now (ride hailing), and Share Now (free-floating services)
Currently 60mm users total
Vision is to merge these services closely to form a single mobility service portfolio with an all-electric, self-driving fleet of vehicles that charge and park autonomously

Millennials like pretty / novel credit cards, and Venmo knows (link)

Limited edition rainbow card offered to top Venmo cardholders on Friday, then available to all users starting March 4th
Unique card styles have proven attractive for millennial customers: Chase Sapphire Reserve was novel because of the metallic alloy composition (company ran out of alloy for time because of high demand)
Venmo card saw 300% MoM growth in monthly active card users from August – September 2018, with largest spend in supermarkets and restaurants

Lyft @ $20/$25bn?? (link) vs Uber valuations

Lyft’s revenue grew from $412mm in H1 2017 to $909mm in H1 2018 (120%)
Net Loss H1 2017 $255mm to $373mm in H1 2018
Assuming Lyft grows H2 2018 at 30% ($2.1bn revenue), $20bn valuation implies 10x revenue; $25bn valuation implies 12x revenue
See sensitivity analysis: (poorly formatted because I’m remote-ing into my office computer on a Mac to use excel lol)

Screen Shot 2019-02-23 at 2.32.27 PM.png

Screen Shot 2019-02-23 at 2.42.31 PM

Note that the trading at pretty comparable multiples though the growth profiles differ (Lyft’s growth, given its smaller scale, is higher). Also, Uber’s growth story is international expansion + food services, while Lyft seems to corner itself in the ride-hailing services with an emphasis on affordable rides (link)

Apple isn’t doing too hot in China – offering interest-free financing (link)

Deals are coming in post Apple’s revenue guidance cut from $89-$93bn to $84bn due to economic deceleration (esp in China)
Sales dropped 40% in India in 2018
Affordability is an issue when comparable phones cost significantly less (Xiaomi or OnePlus)
Chinese citizens probably have more purchasing power, so starting this financing plan (affordability initiative), if proven effective, could move to India
Smartphones globally aren’t doing great either, global smartphone growth up 1.4% due to high-end buyers not upgrading for marginal upgrades
- Huawei achieved the top growth of the five global smartphone vendors
- Mid-tier Honor series helped company exploit growth opportunities, especially in emerging markets
Future smartphone growth overall seem dependent on two things 1) pure innovation 2) price point / affordability. Apple especially lies at the crux where pure innovation is stalled (good is good enough), and the product isn’t marketable to the growing emerging markets
- Interested to see how Samsung’s foldable phone fares in the market with its steep price tag (perhaps limiting mass adoption?)

Another D2C company! Typology (link)

Challenging FMCG (fast-moving consumer goods) with pure digital player. FMCG includes cosmetics, food, DIY, etc.
Of course, wouldn’t be a pure internet / aesthetic player without the vegan, cruelty-free, made in France labeling
Differentiator: Wants to scale beyond single brand (Glossier, etc.) and create e-commerce giant with multiple sub-brands, hundreds of products, and an aggressive e-commerce strategy
- Questions:
  - Isn’t the upside to these small, niche, D2C players the ability to focus distribution / R&D / manufacturing on a limited amount of products? (link)
  - Dilutes immediate brand awareness without (almost confusing) product lines, especially with no brick and mortar presence
  - Can see this working as a marketplace for niche players (platform play), and less so a pure D2C (full value chain) player

Published by Nat Jin